Property defects are one of my favorite types of meditations. Always full of surprises and strange details always unfolding. While they are interesting for me to understand, they are obviously something you all will want to avoid! Here are some observations and quick tips on how to (hopefully) avoid encountering a property defect issue as either a buyer or seller.

For the Buyer

The buyer is the one who is on the receiving end of unfortunate events like this. Imagine moving into a new home (a very expensive purchase) only to discover that there is a plumbing issue, the roof is no good, or a massive structural problem could result in large expenses, etc. Nobody ever thinks this sort of thing would happen to them—until it's happening. 

Tip #1: Do the inspections! It really stinks to have buyers in front of you who might have avoided having to deal with an expensive repair if only they had done a thorough inspection. It’s painful for anyone, but especially for first-time buyers who have less of a budget set aside for upgrades or repairs. Spending a couple of hundred dollars extra for high-quality inspection services can be the difference between getting it repaired or reimbursed in advance and being stuck having to chase after reimbursement potentially. It’s much better to have fewer surprises. 

Tip #2: Be smart when selecting a home inspector. Cheaper is almost never better, and it's also important to weed out the potential for biases and conflicts of interest. There are some situations that can happen where questionable relationships develop between owners, agents, builders or developers, and the inspectors they recommend. It might be advisable to get a referral from a friend or professional you know who has had a positive experience, especially where the inspector’s attention to detail saved them from a potential problem. Attorneys can also make good recommendations if you are using a real estate attorney. 

Tip #3: Agent walk-throughs are NOT inspections (and other thoughts). Agents often do a walk-through of the property to ensure it is cleaned out, certain minor damage is noted, and basic functions of the property are operational. While some things can be stumbled upon at that time, these are not trained inspectors with equipment and expertise! In fact, I’ve had defect cases where even the home inspector didn’t find the problem, which brings me to additional inspections. Home inspectors do not always do extensive mold tests, etc., so some things that aren’t visible (yet) can be missed. Water is highly intrusive, so that’s a very justifiable expense. Also, if you intend to live in the house immediately and aren’t looking to do any upgrades for a while, it may make sense to bring an HVAC professional to inspect the system, as well as an electrician, particularly if the home is older. 

For the Seller

Tip #1: Know your property! Whether or not you occupy the property you intend to sell, it is your responsibility to understand what is going on with it, even if someone else is managing the property for you. This is important because I have come across situations where there was a defect, the agent had been managing the property for the seller with renters prior to the sale, and the agent made a statement to the buyer about a problem that was not disclosed by the seller during the sale. I don’t want to go into a law school lecture about agency concepts, but principals (in this case, a seller) could potentially be held responsible for such statements regarding knowledge of a defect. That being said, owners should be on top of the documentation always. They should also have the property checked out by qualified professionals prior to the sale so they know what they are getting into and can decide what to repair themselves and what they wish to simply disclose to a potential buyer. 

Tip #2: Disclose it all! This might be the most important tip a seller could take home. You must go through the seller’s disclosure list very carefully. The home is typically sold “as is” including everything you mention that is wrong with it. Many sellers have inspections done ahead of time and provide prospective buyers with a copy. Knowing the property needs a few minor repairs may even increase buyer confidence because that is a reasonable expectation when the property is not new. Trying to conceal, or failing to disclose defects can subject sellers to a lawsuit to recover damages. The details also matter. If there is construction prior to selling the home, you are responsible for knowing whether any plumbing was replaced, or if only fixtures outside of the wall were replaced—there’s a difference! If there is an issue, it is much safer for the seller to have disclosed it in general. 

For All Parties

One thing that I recommend for both the buyer and seller is to use a real estate attorney for the transaction. This will help ensure you are doing all the right things. Agents are there mostly to negotiate for you on price but are not legal professionals who can guide you with certain things. Buying or selling a house is not the same as a car, people! Spend a little extra coin and get it done right. If you feel confident buying or selling a home without doing these things, hop on over to home inspector TikTok for some doses of reality—yikes! Sincerely, I hope to see you in your new home, or having a smooth transaction and not winding up in front of me, or worse, in court/arbitration!